Providence St. Joseph Health boosts operating margin in 2017

Providence St. Joseph Health drew a modest operating income of $3 million in fiscal 2017, compared with an operating loss of $255 million the year before.

The Renton, Wash.-based not-for-profit system's operating margin last year was 0%, an improvement from its 1.2% operating loss in 2016. The system's operating earnings before interest, depreciation and amortization margin also improved last year: rising to 5.7% from 4.7% the year before. Providence St. Joseph reported its 2016 information on a Pro Forma basis.

Providence St. Joseph's operating revenue was $23.2 billion in 2017, up 5% from $22.2 billion the year before. Operating expenses rose 3% in the same time period to $23.2 billion compared to $22.4 billion in 2016. During that time, the system's excess of revenue over expenses declined 85% to $780 million in 2017, from $5.2 billion in 2016.

Inpatient admissions were down 1% in 2017 to 522,000 from 526,000 in 2016. Acute adjusted admissions were up 1%, as were acute patient days. Long-term patient days were flat, as were emergency room visits. Outpatient visits and surgeries were a bright spot for the system on an otherwise relatively flat volume growth front. Those categories increased by 5% and 8%, respectively.

Providence St. Joseph spent 4% more on salaries and wages compared with 2016. The system's net patient service revenue went up 3% during that time, and its premium and capitation revenue increased 8%.

Providence St. Joseph has not commented on reports over its rumored talks to merge with Ascension Health, a deal that would create the country's largest hospital chain.